McAuliffe shifts state contracting strategy

Travis Fain, tfain@dailypress.comDaily Press

Gov. Terry McAuliffe announced a major new push Tuesday to get the state doing business with small firms and companies with minority or female ownership.

He signed an executive order that calls for 42 percent of the spending in various executive branch contracts to go to these companies. He also promised a crackdown on contractors who say they meet the state's SWaM – Small, Women-owned, and Minority-owned Business – qualifications, but don't.

His announcement was met by applause from minority and female business owners who gathered at Astyra, a staffing company in Richmond, to watch McAuliffe sign the executive order.

The 42 percent threshold would be the highest in Virginia history, McAuliffe said. That percentage has varied over the past 10 years, according to state figures, going from just over 14 percent in a couple of years to just under 42 percent in others.

In the last five fiscal years it has ranged from 31.6 percent to 41.8 percent.

In the past, these minority participation goals have been seen as optional and often set aside by some state agencies, McAuliffe said. The governor made it clear Tuesday that's no longer the case. His order calls on each agency to name a "SWaM equity champion," and he named his own point person to keep an eye on things.

He also promised a review of existing contracts, and new scrutiny for future contracts. If the state finds contractors bending the rules, agencies will be empowered to withhold payment until the contractor complies.

"It will not be forgotten about," McAuliffe said. "You're going to be held accountable."

State Sen. Louise Lucas, D-Portsmouth, said big contractors have ignored SWaM rules in the past, neglecting to bring minority firms in on projects because they knew they didn't have to. She said McAuliffe's new focus on the issue should bring improvements.

McAuliffe's order also creates a new class of businesses called micro businesses. These are businesses with no more than 25 employees and no more than $3 million in average annual revenue. The deck will be stacked in favor of micro businesses when it comes to state contract decisions valued under $10,000, and they'll have some advantages in larger bids.

McAuliffe's executive order runs several pages and includes a number of other changes in state contracting protocol, as well as studies that may lead to more changes.

Asked for comment on the order, a Virginia Chamber of Commerce spokeswoman said the group's policy people were still digesting it.